Digging Deep into Companies' Books

Part II -- Common Accounting Tricks

Updated Sept. 4, 2002 4:30 p.m. ET

Part I -- Overview

Q: Which accounting trick is most commonly used? A: Probably, trying to record revenue too quickly.

Q: How do companies do that? A: In order for a company to record revenue properly, there are three things that have to have occurred. Number one, [the seller] must have provided everything that was required, whether it was developing a product, shipping it or delivering it. Second, you need unconditional...